Earn A 5.74% Yield With This Bank Loan Closed-End Fund

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About: Eaton Vance Senior Floating-Rate Fund (EFR), Includes: BKLN, ECC, JFR
by: A1 Investments
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A1 Investments
Debt, ETF investing, closed-end funds, portfolio strategy
Summary

This fund has historically offered a great yield for a floating rate CEF but it seems they have been impacted by rising borrowing costs.

The monthly distribution is well-established in terms of coverage and UNII, I just don't expect much income growth.

In addition to strong distribution coverage, the fund's NAV has not eroded over time.

While the fund itself has performed well, has solid fundamentals, and can be a good fund pick, there are concerns.

This fund is sensitive to news of defaults and we could be nearing a recession in the next 2 years.

Floating rate bank loans are generally known to protect investors from interest rate risk due to their interest rates rising with short-term LIBOR rates. However, despite usually being short duration, they do come with quite